Incubators Hot Again But Unlikely To Get Burned

Naval Ravikant is an example of the new face of dotcom startups. He sees the method of nurturing startup ideas with venture capital cash as less of a bank and more like a movie studio.

Ravikant runs a tight ship, with hard deadlines. "The engineers have
the freedom to experiment, but they have 90 days to ship a product," he
says. "The product has to grow organically, without any marketing."
Those that are still growing on their own 12 months later get to live.

They
also receive more funding, and Ravikant plugs them into a distribution
network he's building. Web products that don't hit their growth numbers
get killed -- a far cry from the old incubator system, which kept bad
ideas alive for years.

Another key difference is the cost of
failure. Since a Web 2.0 idea can get to market for as little as
$50,000, Ravikant can afford to try things, tweaking products after
they ship, in a way that even the most successful incubators (such as
Bill Gross's Idealab) never could in the dotcom era. That might prove
to be a model for more than just incubators.